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When selecting suppliers, large companies hold significant power to shape the market and deliver alignment to broader organisational objectives. For the growing number of Indigenous-owned businesses in Australia, winning contracts is not just an opportunity to expand their business – It can have immediate and far-reaching impacts on their families and communities.
With “social license to operate” now an imperative, many organisations are seeking ways to enhance their public image. This is particularly pertinent for energy and resource (E&R) companies, who – often operating on native title land – are expected to demonstrate a long-term commitment to their local communities and deliver on a social license to operate.
E&R organisations are responding by examining how they engage with Indigenous suppliers and where the improvement opportunities lie.
What are the barriers to Indigenous procurement for large E&R companies?
The issues faced by the buyer’s side remain complex. For example, procurement managers must:
Similarly, suppliers may also face several challenges, including:
What are large companies doing to overcome this?
A number of E&R companies are making significant positive strides.
Some are finding success with “quick win” approaches such as:
At a strategic level, these buying organisations are beginning to form dedicated local content teams to champion initiatives within the organisations themselves. Investing in select Indigenous supplier relationships (such as through secondment programs) can also facilitate supplier capability uplift. The executive mandate of the Indigenous procurement agenda can galvanise the organisation towards this common goal which can be supported by adjusting staff performance metrics to reflect its pursuit of these targets.
The key is finding approaches which offer tangible and lasting results. Perhaps the most powerful change is adopting a mindset shift from viewing Indigenous procurement as a compliance activity to an opportunity to create real impact.
When it comes to tackling this challenge, there is still a significant way to go. To deliver lasting change, it is the responsibility of large organisations across all functions, not only procurement, to continue to ambitiously prioritise and invest in their Indigenous agenda.
Lauren is an analyst in Perth’s Supply Chain and Procurement Consulting practice. Having worked with procurement functions across a number of industries, Lauren is developing a growing interest in helping these teams uplift their capability allowing them to provide further opportunities for Indigenous and emerging suppliers.
Chris is a Director in Perth’s Supply Chain and Procurement Consulting practice with over 20 years of blue chip experience across a variety of geographies and industries. Chris has a track record of delivering major procurement programmes and innovative, value creating strategies via effective collaboration with internal & external stakeholders.